© Steve de Neef
Founded by Andrew Peters and his wife, Sam, and now supported by Struan Coleman as their business partner, the company currently harvests between 40,000 and 50,000 scallops annually. Although their ambition is tempered by realism, they believe that their hard work is beginning to translate into a much more efficient farming model – one that they are now well placed to expand.
Applied research: the real deal
There’s an element of symbiosis about Coleman’s journey into Maine’s scallop sector – if it wasn’t for Vertical Bay, it’s unlikely that he’d have studied scallop aquaculture as part of his master's programme at the University of Maine; while on the other hand Vertical Bay might not be doing so well without Coleman – as a post-grad he helped them with financial analysis.
“My background and the way that I connected initially with Andrew and Vertical Bay very much encapsulates the story of scallop farming in Maine,” he reflects.
Indeed, Coleman’s masters coincided with a time when a handful of independent scallop producers were beginning to dabble in the ear-hanging method that had been pioneered in Japan. And it was during his studies that he first encountered Peters. By 2022, at which point Coleman was working in WWF’s impact investment team, they both decided to devote themselves to the development of Vertical Bay.
“Andrew was interested in giving it a real go and trying to commercialise the business and I was helping with business model planning, financial analysis, the resources needed to do this. And then at some point in 2022 or 2023 we looked at each other and said we should just do this. So I joined the business,” Coleman recalls.
“Since then it’s been a three-year journey of testing the market and understanding what customers need and how to scale up and put the right machinery in the right places and go from there,” adds Coleman, who joined full-time at the end of last year.
The Japanese connection
As Coleman explains, Vertical Bay’s farming techniques can be traced back to the late 1990s, when an exchange programme brought groups of fishermen and academics from Maine to visit Aomori Prefecture in Japan to learn about their nascent scallop industry, which had recently evolved from a wild stock enhancement project to farming the bivalves to market size.
Armed with Japanese knowledge and technology, this success was soon mirrored in Maine, where the industry morphed from enhancing wild stocks into one that included dedicated farmers. Although only handful of growers have persisted – and all are still operating on a small scale – Coleman sees huge potential. Especially, if and when some of the early adopters start to generate significant revenues.
“What's really interesting is to actually look at the three or four hundred [shellfish farming] leases in Maine. A good percentage of them list scallops as a species that they intend to or have the option of growing. But everyone's kind of watching and waiting to see how it all shakes out. If someone can figure it out, then you will start to see the industry develop,” he reflects.
© Vertical Bay
Farming techniques
Although Vertical Bay have been able to adopt some of the techniques used in Japan, success is not a simple question of cutting and pasting, Coleman notes. And learning the ropes is a painstaking process.
“We’ve had to take the machinery that exists in Japan and adapt it for our local oceanographic conditions and our species of scallop. Any industry deals with trial and error, but if you're making sneakers in a factory, you can tweak a part of your production chain and the next day you get 5 percent better. With scallop farming it takes two years to go from seed to market size and you just have one shot at each stage. So trial and error takes a long time,” he explains.
Vertical Bay’s current system is based around collecting wild spat in fine mesh nets every autumn and then on-growing them in the spring. The first 12 months of on-growing takes place in either pearl or lantern nets. The shells are then drilled through their ears and hung in pairs from droppers for up to another 12 months – hence being known as ear-hanging.
It’s a labour-intensive process, although their recent purchase of a Tech3 machine has significantly increased throughput.
“Historically we've been drilling each scallop one at a time and then pinning them and on the lines, but the Tech3 is the Rolls-Royce of ear-hanging equipment in Japan. It drills and pins two scallops at a time onto the dropper line. And this year we're seeing really good results. It's increased our throughput pretty dramatically,” Coleman reflects.
Another labour-intensive process is removing the meat from each scallop. But Coleman doesn’t expect this to become mechanised any time soon, at least not for smaller players.
“I don't think we'll ever get away from that. There are automated shucking machines out there but you need to be at a massive scale in order to actually justify the cost of one of those. I think you also lose control over the quality of the products,” he notes.
A ready-made market
While farming scallops might still be at an early stage in the US, the demand for them is established and unquestionably consistent – which is not the case for many other relatively novel aquaculture sectors.
“The market for scallops in the US is just south of a billion dollars. But sometimes more than half of what we're consuming in the US Is imported, so there's a trade imbalance question there. If you can grow them, people will buy them. It's just figuring out how to grow them at scale efficiently,” Coleman reflects.
Vertical Bay currently harvests 40,000-50,000 scallops – equating to about 2,000-2,500 pounds of meat – a year. The company primarily sells directly to restaurants, with chefs often serving the scallops raw. They harvest to order and ship out the same day.
“At this point, we sell the majority of our inventory directly to restaurants, which is fun and challenging, like working with chefs and going into the restaurant and bringing them a sample and brainstorming how to use them on the menu,” Coleman explains.
This is liable to change – if and when they really start to scale.
“We want to maintain that connection [with the customer], but know that in order to move, 10, 20 or 30,000 pounds in a year, you’ve got to work with a handful of larger customers who can offtake product and then distribute it through their own networks,” he points out.
“We're hoping to scale next year by 3 to 4x and then continue to build from there. That's kind of when we need to make that jump and drop our price and sell kind of larger volumes to wholesalers,” he adds.
In order to achieve this Coleman is primarily looking to improve farming efficiency. But Vertical Bay will have to rely largely on their own knowledge and experience to do so.
“If we wanted to start an oyster farm there are many examples in Maine of how this is done successfully. But for scallops this whole industry is still trying to figure out the basics: like how you collect large quantities of seed, how you move your bags around, how you empty your bags, and how you clean your dropper lines. These are questions we think about all the time and just continue to try and innovate in order to make our process more efficient,” he explains.
© Vertical Bay
While he’s fairly certain that there won’t be a quick fix, but he hopes that, in the medium term, it will be possible to reach price parity with wild caught scallops – something the larger mussel farmers in the region, for example. have already achieved.
“It’s a questions of getting to a scale that allows an owner, operator and a small crew to do this efficiently and produce the volumes needed at a price that’s competitive with what else is out there on the market,” he emphasises.
As well as increasing efficiency the company is also looking to increase its farming area, although the licencing process is a major issue. While Coleman believes that Maine’s licencing system is well designed, he notes that there aren’t enough people to review applications, meaning that it can take over four years for a decision on a lease application to be made, making it difficult for businesses to plan for growth. While the turnaround time has improved a little recently, with 24-30 months being the new average, he’d like to see this figure reduced to 6-8 months, to help companies in their plans to expand.
Looking ahead
Looking to the future, Vertical Bay is aiming to grow incrementally – retaining their independence as owner-operators – with a near-term goal of profitably producing 10,000-15,000 pounds of scallops per year.
They would also welcome others to join them in order to build momentum in the sector.
“If you only have two or three farmers that are doing this at a very small, semi-commercial scale, it's really hard to advocate for resources. It's hard to advocate for biotoxin testing support or grant funding, whatever it may be. But collectively, if there were more people giving it a go and seeing good results and progress, you could advocate more effectively as an industry and say it has real potential,” Coleman reflects.
And, in terms of advice to prospective new entrants, he emphasises the importance of learning from existing farmers to avoid costly mistakes.
“Spend as much time as you can researching and planning before you actually put anything into the water,” he concludes.
The company mainly just sells the meats these days © Vertical Bay
